The Figure Given Below Depicts the Foreign Exchange Market for British

Multiple Choice

The figure given below depicts the foreign exchange market for British pounds traded for U.S. dollars.Figure 22.2

-Purchasing power parity exists when domestic currency:

A) maintains a fixed exchange rate with foreign currency.
B) is not convertible into foreign currency.
C) buys more goods at home than abroad.
D) buys as many goods at home as it does abroad.
E) appreciates in value against foreign currency.